The Federal Open Market Committee (FOMC) is meeting soon, and this is a big deal for the crypto world. Let’s break down what’s expected and how it might affect your crypto investments.
What the Experts Say
Crypto analyst Byzantine General predicts Bitcoin will stay in a range between $90,682 and $108,388 until the FOMC announces its decision. They see three possibilities:
- Dovish surprise (interest rate cuts or pause):
This could be good news for Bitcoin, potentially pushing its price above the current range. - Neutral stance: Bitcoin’s price might stay within the range for a while longer.
- Hawkish stance (interest rate hikes): Similar to a neutral stance, expect sideways movement for Bitcoin.
The Macroeconomic Picture
ING, a major bank, offers a broader perspective. They believe the Fed will likely hold off on further rate cuts for now, needing more evidence of economic slowdown and lower inflation. President Trump’s policies could impact this, potentially delaying any rate cuts. While ING initially predicted a March rate cut, they now think that’s unlikely. They still forecast three rate cuts for 2025, depending on things like wage growth and the labor market. They also suggest the Fed might end its balance sheet reduction (quantitative tightening or QT) by mid-2025 if excess liquidity falls below a certain level.
The Dollar and the Fed’s Independence
ING believes the dollar will likely remain strong if the Fed stays cautious. President Trump’s views on interest rates have raised questions about the Fed’s independence, but Chair Jerome Powell is expected to avoid directly addressing this. Trump, however, has made it clear he wants lower interest rates.
The Bottom Line
The FOMC meeting is a key event for crypto. While a dovish surprise could boost Bitcoin, a neutral or hawkish stance might mean more sideways trading. The overall macroeconomic situation, especially the Fed’s actions and the dollar’s strength, will play a significant role in shaping the crypto market’s future. At the time of writing, the total crypto market cap was $3.45 trillion.
